Your attitude towards money has a hand in your success or setbacks. Financial success isn’t always about having a well-paying job or starting a good business. Sometimes, it has to do with your behavioral tendencies.

How your inclinations affect your wellbeing

Every individual has their beliefs and behaviours. The way your mind works determines your attitude towards money. That, in turn, affects your wellbeing:

1. Prioritize Financial Safety vs. Prioritize Social Status

What is your first thought when some extra cash enters your bank account? Is it:

Oh good. More money to stash away.
Nice! Now I can get those cool Italian shoes I’ve been eyeing at the store.

If you fall in the first category, it means that you are more concerned about the security that money provides. You wish to have money available in the future just in case of a job loss, a medical emergency, or some other unforeseen event.  While that motive may be applauded, you need to be careful that you do not begin to live in fear.

Fear can keep you from living your best life. In its extreme, people who value safety over status may pinch cash even to their own detriment. They might fail to put their money to good use when the situation calls for it. Without intending to, they find themselves living in a self-imposed lack – failing to make wise investments, to look good, to enjoy certain comforts that they could easily afford, or even help a dear one in need.

On the other hand, if you value status over security, you basically live to impress not only those around you but also yourself. You burn cash as soon as it enters your pocket. You live for comfort and enjoyment. Once you want it, you buy it as soon as you can. Do you belong in this category? Then you certainly need to keep the source of your income stable. Should something unexpected happen, you might find yourself seeking financial help from friends and family because you’ve failed to set money aside. You also probably didn’t make any wise investments.

2. Prone to Saving or Prone to Spending

As you progress in your career, the more money you make.  What you choose to do with every raise is determined by whether you are a spender or a saver. Of course, the amount of money you make affects the kind of house you live in, the type of car you drive, your recreational activities, and your ability to go on vacations. It’s only natural.

For spenders, they change their lifestyle and increase their spending in proportion to the amount of money they make. Savers, however, increase their savings as they make more money. Sure, a saver’s lifestyle also improves but they feel better saving more rather than spending more. They mostly maintain the same standard of living, only making improvements where they must. They try to delay gratification in the hopes of growing their money so that they can achieve more in the long run.

Just as we revealed in the previous section, both parties must take caution. For spenders, spending everything you make could cause you to go broke in the long run; living your best life now only to have nothing to fall upon when you retire.

For savers, you must take care not to save your life for later. Perhaps, by the time you feel you are ready to enjoy the money you’ve accumulated, it might be too late. Life is full of uncertainties.

3. Budgeting vs. Going with the Flow

Not everyone finds it necessary to budget their monthly income. Most people prefer to go with the flow. They find budgeting to be a tedious bore. Sure, they know when it’s time to pay rent or restock groceries. But they don’t care much about keeping track of where their cash goes each month. All they know is that money was made and money was spent. They can’t make an exact accounting.

On the other hand, there are those who like to keep track of how they spend their money each month. Once they receive the month’s earnings, they divide it into portions to take care of different expenses, for example, transport, grocery shopping, eating out, entertainment, and so on. At the end of the month, they can tell the areas in which they exceeded their budget or spent less than they budgeted.

While budgeting is a wonderful way to keep track of your money, you have to ensure that you make them realistic. Unrealistic budgets could disrupt your life, causing financial instability rather than fixing it.

4. Positive Energy vs. Negative Energy

Most of us grew up to phrases like, ‘Money is the root of all evil.’ The way people around you, your family most of all, talked about money made an impact on you, whether you are aware of it or not.

When you have a negative mindset, you’ll end up repelling money rather than attracting it. When you see someone riding a nice car and living a good life, the first thought that comes to your mind is, ‘They’re probably fraudsters or unwashed traders,’ without knowing for sure how they got to be rich. Such thoughts close your mind to finding innovative ways to create wealth.

Sometimes, a negative money mindset could be as simple as feeling guilty when you spend a little bit extra on yourself, even though you work hard enough to make a decent living.

The Way Forward

Money comes not to those who desire it, but to those who plan for it.

Divide your earnings so that you may live a balanced life:

Allocate 70% of your earnings to paying of bills, clothing, feeding, and other everyday expenses, as well as for recreational activities. Life must be enjoyed to be worth living.
Keep 10% of your earnings as your own. When it grows to a reasonable amount, find something profitable to invest in so that you may make more money.
Use 20% of your earnings to settle your debts if you have any. Otherwise, let the 20% go towards your savings.